IGG(HK:00799)2022-09-05 08:59Financial Performance - The company reported revenue of HKD 2,485.74 million for the first half of 2022, a decrease of 23% compared to HKD 3,237.46 million in the same period last year, and a 12% decrease from HKD 2,813.44 million in the second half of 2021[14]. - The company recorded a loss of HKD 171.77 million for the first half of 2022, which is a 17% improvement from a loss of HKD 207.31 million in the second half of 2021, and a significant decline from a profit of HKD 576.92 million in the same period last year[15]. - The overall loss for the first half of 2022 was approximately HKD 171.77 million, compared to a loss of HKD 206.91 million in the second half of 2021[15]. - The group recorded a net loss of HKD 114 million in the first half of 2022 due to valuation changes and performance losses from invested companies[25]. - The company reported a total comprehensive loss of HKD 269,747,000 for the six months ended June 30, 2022, which includes a loss of HKD 171,771,000 and other comprehensive losses of HKD 97,976,000[175]. - The company reported a basic loss per share of HKD 0.1481 for the period, compared to earnings of HKD 0.4901 per share in the previous year[166]. - The company reported a net cash outflow from operating activities for the period was HKD 140 million, a significant decrease from a net cash inflow of HKD 541 million in the same period last year[44]. Revenue Sources - Revenue distribution for the company in the first half of 2022 was 37% from Asia, 33% from North America, and 24% from Europe[18]. - The revenue from the game "King of Glory" was HKD 2,008,898,000, down 26.6% from HKD 2,737,262,000 in the previous year[186]. - The game revenue from Fuzhou Tian Meng for the six months ended June 30, 2022, was HKD 102,307 thousand, contributing 4.12% to the group's total revenue[153]. User Engagement - The company has a total user base of 1.4 billion, with a monthly active user (MAU) count exceeding 33 million[17]. - The number of global registered users exceeded 540 million, with nearly 11 million monthly active users as of June 30, 2022[20]. Cost and Expenses - Research and development expenses increased by 48% to HKD 738 million compared to HKD 498 million in the same period last year[35]. - The total employee-related costs for the period reached HKD 714 million, an increase from HKD 515 million in the first half of 2021[51]. - Advertising and promotion expenses were 774,484 thousand HKD for the six months ended June 30, 2022, down from 935,264 thousand HKD in the same period of 2021, a decrease of about 17.2%[195]. Strategic Initiatives - The company plans to increase advertising and marketing investments for potential new games to drive revenue growth in the second half of 2022[15]. - The group aims to maintain a strategic focus on mobile gaming, having shifted its emphasis from client and web games since 2013[17]. - The group aims to deepen its global R&D and operational bases to drive long-term development[26]. Corporate Governance - The company is committed to maintaining high levels of corporate governance in line with shareholder interests, with ongoing reviews and improvements[70]. - The board consists of five executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[70]. - The external auditor, KPMG, has reviewed the interim financial report in accordance with the relevant standards[68]. Shareholder Information - The company has a total of 305,970,647 shares held by Mr. Cai Zongjian, Mr. Xu Yuan, and Mr. Zhang Hong, representing 25.56% of the total shares[71]. - The company did not recommend any interim dividend for the six months ended June 30, 2022, compared to an interim dividend of HKD 0.145 per share for the same period last year[50]. Investment and Assets - The group's cash and cash equivalents stood at HKD 1.670 billion as of June 30, 2022, compared to HKD 1.950 billion as of December 31, 2021[43]. - The total assets as of June 30, 2022, were HKD 4,953,659 thousand, a decrease from HKD 5,456,152 thousand as of December 31, 2021[171]. - The company's total liabilities and equity amounted to HKD 3,769,565,000 as of June 30, 2022[176]. Structural Agreements - The company has ensured compliance with Chinese laws regarding foreign ownership in value-added telecommunications and internet content services through these agreements[139]. - The financial performance of Fuzhou Tianmeng will be consolidated into the company's financial statements as if it were a subsidiary[139]. - The company aims to enhance its operational capabilities and market presence in China through these strategic agreements[144]. Performance Reward Plans - The performance reward share plan was adopted on May 21, 2021, allowing for the conditional grant of up to 71,635,355 shares, representing approximately 6% of the total issued share capital as of that date[131]. - The shares granted under the performance reward share plan will vest in five tranches, with each tranche representing 20% of the total shares, to be assessed based on the relevant financial year performance[135].